Markets wrap: Banking and technology stocks retreat in weak session for ASX

The Australian sharemarket has handed back some of its recent gains with banking and technology stocks in retreat.

Big-name banking and technology companies hit reverse on Tuesday as the Australian sharemarket registered its worst session in nearly two weeks and capped its worst month since January.

ASX traders handed back a hefty slice of their recent gains as US bond yields leapt on sizzling German inflation print and hawkish rhetoric from US Federal Reserve Governor Christopher Waller.

Waller’s comments on inflation prompted a swift retreat for rate-sensitive tech and payment stocks, while underwhelming building approvals data also knocked the wind out of local lenders Commonwealth Bank, Westpac, NAB and ANZ.

The benchmark ASX 200 finished the day 75.4 points, or 1 per cent, lower at 7211.5, while the broader All Ordinaries shed 67.4 points, or 0.9 per cent, to close at 7455.2.

The ASX 200 finished Tuesday’s session 1 per cent lower at 7211.5. Picture: NCA NewsWire/Flavio Brancaleone

The Aussie dollar was hovering just under 72 US cents at the local close.

The local market had gained strongly either side of the weekend as encouraging data raised hopes US interest rates would not need to be hiked any more aggressively than investors had hoped.

Wall Street may have been closed overnight for Memorial Day, but there was still enough in the news to rattle traders across the Pacific.

Mr Waller sent pulses racing when he said he saw interest rates continuing to rise through the rest of the year and potentially more if it meant bringing inflation under control.

“Over a longer period, we will learn more about how monetary policy is affecting demand and how supply constraints are evolving,” Waller said

“If the data suggest that inflation is stubbornly high, I am prepared to do more.”

City Index analyst Tony Sycamore said surging crude oil prices only added to the smouldering bond market bonfire.

Brent crude jumped to $US123 a barrel as European leaders moved closer to banning Russian oil imports, a potential headwind as the driving season in the US kicks off and a broader reopening commences in China.

Local energy companies were mixed on the news.

Media and telecommunications stocks were badly bruised on Tuesday with Telstra 1.3 per cent lower at $3.88. Picture: NCA NewsWire/Flavio Brancaleone

Woodside Energy slipped 1.6 per cent to $29.76, Viva Energy fell 1.1 per cent to $2.84 and Santos was flat at $8.20, but Beach Energy managed to gain 5.2 per cent to $1.725.

Elsewhere, coal miner Whitehaven added 3.5 per cent to $5.28 and New Hope Coal rose 3.1 per cent to $3.71.

After a three-day rally, local technology sector stocks slipped into the red.

Block Inc lost 3 per cent to close at $126 and fellow buy now, pay later firm Zip Co fell by 6.2 per cent to close at 91.5 cents.

Xero lost 3 per cent to end the day at $89.29, Wisetech Global dropped 2.7 per cent to close at $42.10 and Altium was 2.8 per cent down at $28.76.

Tyro Payments plunged 6.6 per cent to $1.06, EML Payments fell 6 per cent to $1.50 and Megaport closed 5.4 per cent lower at $7.31.

Media and telecommunications stocks were also badly bruised on Tuesday with Telstra 1.3 per cent lower at $3.88, jobs site Seek losing 4.5 per cent to $24.25, real estate portal REA Group dropping 3.3 per cent to $112.61 and Domain down 2.4 per cent to $3.20.

The major banks closed lower on Tuesday.

An unexpected 2.4 per cent decline in April building approvals weighed on the major lenders, knocking Commonwealth Bank down 2.1 per cent to $104.36.

ANZ dropped 2.8 per cent to $25.04, National Australia Bank lost 1.9 per cent to $31.26, Westpac was 1.5 per cent worse off at $23.87 and Macquarie Group ended 1.1 per cent lower at $185.98.

Mining stocks were among the better performers on the day after better-than-expected Chinese manufacturing data and the announcement of a stimulus package that appears supportive of commodity prices.

BHP may have fallen 0.7 per cent to $44.61, but Rio Tinto gained 0.6 per cent to $114.45.

Fortescue Metals added 1.3 per cent to $20.11, Mineral Resources was 1.8 per cent higher at $63.85 and South32 rose 2.5 per cent to $5.